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Tuesday, September 18, 2018

Darkstream: Trade war is good for the U.S. economy


From the transcript of the Darkstream:

So today the God-Emperor announced $200 billion in new trade tariffs targeted against Chinese imports, and he's also made it clear that if China goes ahead and retaliates he's going to go ahead and drop even more tariffs on them as well. Now this, of course, has all the usual suspects, all the free traders, all the neocons, all the people who think that responding "uh, Ricardo" is a meaningful response to tariffs, in a tizzy. And they've been upset about this, they've been arguing their theory over and over and over again ever since the first tariffs were announced a couple months ago, but if you noticed something,  what hasn't happened, what consequences were predicted by all of these doomsayers didn't come to pass.

Instead what happened is what anti-free trade people like myself predicted would happen, and what proper economic theory, conventional economic theory, predicts would happen - the economy grew! This is not difficult, this is not at all hard. Now, if you want to argue that the idea of a objective measure of a national economy,  especially one that is denominated in a currency, is a contradiction in terms and that it's not possible to measure a national economy, especially not in its own currency I would accept that argument, but then there's no point in having this discussion because it's not possible to argue about something that can't be quantified becoming larger or smaller. If you're accepting mainstream economics to the point that you're talking about the economy growing or the economy shrinking, then you have to accept the mainstream theory and what the mainstream theory very clearly states is that the size of the economy as measured in gross domestic product is C plus I plus G Plus X minus M, as consumer spending plus investment plus government spending plus exports minus imports, so what happens when you reduce imports the economy grows. You know, this is an absolutely straightforward mathematical relationship, it is a very simple equation, and so it's not at all surprising that despite all the doomsaying,  despite all the ridiculous predictions, that the economy has grown and we've actually seen the fastest growth rates for the U.S. economy since the 1980s.

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88 Comments:

Blogger Ominous Cowherd September 18, 2018 8:07 AM  

GDP is a stupid mis-measure. Currency is an elastic ruler. GDP is still a useful metric, and is still correlated to what we care about.

Blogger Peaceful Poster September 18, 2018 8:11 AM  

In the category of worst economist in the history of mankind (a yuge list, granted) I nominate Ritardo.

Blogger Jamie-R September 18, 2018 8:14 AM  

The issue isn't the USA though, and I don't think the defence chiefs that counsel Trump see it that way either. China is about to take a nose dive. It will retreat eventually, from some big money projects due to it (all military related). I hope no one in the West (probably Trudeau though) will lecture them on human rights when it hits too, because it will be bigger than Japan's fall from grace into the 90s, and will be destabilising. That will hit the world markets. The flow on effects then hit Australia, which has a ridiculously overvalued property market, that takes a 2007 USA Property Market nosedive, that flows on. In the end, some +50% of world growth came from China growing, they aren't doing it at the same levels anymore with tariffs, and with more tariffs, the knife keeps twisting.

Blogger Jackson Peds September 18, 2018 8:27 AM  

VD, guys, I Wish to ask you.

As an uninformed party, when I get to talk about with my free-trading/neoliberal etc. peers, I hear the same defence from their mouths, over and over:

"But free-trading/neoliberal societes have still bigger wages, more life rate expectancy and more luxuries and social benefits that other non-free-trading/neoliberal societies."

Something upon which I can't find actual evidence against.

Can someone pinpoint me to a riposte to said mantra?

Blogger Daniel September 18, 2018 8:36 AM  

Jackson, the riposte is: "Tell that to Venezuela!"

Blogger James Dixon September 18, 2018 8:37 AM  

> ...this is an absolutely straightforward mathematical relationship, it is a very simple equation...

Yeah, it's not like this is complicated.

> "But free-trading/neoliberal societes have still bigger wages, more life rate expectancy and more luxuries and social benefits that other non-free-trading/neoliberal societies."

The US and the other developed countries had all those things before they became "fee trading/neoliberal societies". China, Japan, and the other examples they will use do not practice free trade nor are they "neoliberal societies".

Blogger Sherwood family September 18, 2018 8:37 AM  

Tariffs are the only rational policy to a large competitor that is using its advantages to "dump" goods in your market in a way that risks the destruction of your own industries.

We used them very successfully in the 19th century to grow our manufactures and there is no reason why we cannot do so again. The U.S. literally holds almost all the cards here.

China makes tons of goods but those are useless to them without a market in which to sell them. Europe, Africa, South America, Australia, and the rest of Asia together cannot absorb the difference between what China wants to sell and what China can sell with these new tariffs.

We could still provide them that market but they have to play ball. They are not playing ball and so we jack up the cost of doing business in a way that helps our own businesses but hurts theirs (a reversal of decades of policy).

Stopping the flow of U.S. dollars to China keeps those dollars at home where they will be invested in our economy instead. Hence, our economy grows and China's shrinks. And we can do this all day because even if the price of domestically produced goods grows the money is still in our economy instead of going to China.

Blogger Uncle John's Band September 18, 2018 8:39 AM  

@4. Jackson Peds

There are no "free trading nations". You are asking for a rebuttal to a leprechaun or Trump-Russia collusion.

Start by asking your friends to identify these free traders. You can share stats, but if they are bleating about the benefits of something that doesn't exist they are likely liars and or idiots and a fact based conversation won't go far.

Blogger bob kek mando - ( Heterosexuals Live Life On The Easiest Reproductive Setting ... which means that the entire world will be OPPRESSIVE until the Law requires everyone to have a sex change ) September 18, 2018 8:49 AM  

4. Jackson Peds September 18, 2018 8:27 AM
Can someone pinpoint me to a riposte to said mantra?



most of them you can't use Dialectic on because they don't have even a rudimentary understanding of what's being talked about.

IF
you find someone with basic familiarity with the GDP formula
THEN
you can ask them why the GDP formula itself says that the USA running a trade deficit since 1981(?) has been a massive drag on our economy.

there are three possible outcomes here:
1 - economists are too fucking stupid to create a metric which can actually measure the 'benefits' which they purport will accrue to the nation from Muh Free Trade

2 - the GDP formula is correct ( at least in this respect ), that long term trade deficits are crippling to the economy.

3 - the healing power of "and"

if you want to bypass the econ lesson about GDP, ask them why inflation adjusted blue collar and middle class wages are stagnant or down since the 1970s.

i mean, we're 40 years into this "Free Trade has NO deleterious effects" experiment now. i think maybe some of the answers are getting obvious.

you could also those who consider themselves Conservatives, why it is that the United States was founded on the principle of funding the government via Tariffs ( taxes on international trade ), when did this change, and how long have school children been getting lied to about how 'Muh Free Trade' is somehow a 'Founding Principle' of the US.

or, you could just point out that Free Trade is a strategy endorsed by Marx in the Communist Manifesto as a tool to help destroy Capitalism.

Free Trade is a founding principle of Communism and Socialism.

Tariffs are a founding principle of the United States. i mean, it's right there in the Constitution. read it for yourself.

Blogger Johnny September 18, 2018 8:52 AM  

China has been having very rapid growth, and it is not going to continue. Like the USSR in an earlier period, they are a non industrial society going to an industrial society. Thus the rapid growth. Once most of that is over growth will slow, typically with a slide that is very difficult to stop.

In terms of funding growth with debt accumulation, we do it on the federal level. The Chinese do it, at least in part, by having their banks carry bad debt, loans that are not adequately backed. That makes it a little harder to track what is going on. Kind of like our mortgage loan crises, only more general. You know, a more administered economy than ours.

As for our trade with China, they export to us more than we export to them, thus they are more vulnerable to a trade shutdown. The scuttlebutt right now is that they can shift exports to somebody else. That is not really an important problem for us if we are primarily interested in our own wellbeing, and less concerned about the degree of damage to China.

Blogger Jackson Peds September 18, 2018 9:03 AM  

Thanks for all of your insight, guys, I will keep those discussion points in mind.

Just a tidbit; I am not American, I am Greek, and liberalism and Free Trade is a phenomenon it was called it was good for us (EU) but never explained why.

Thanks for helping me dispelling those illussions with simple facts that any onlooker can understand.

Now, I won't hold the topic's discussion any further.

Once more, my thanks.

Blogger VD September 18, 2018 9:09 AM  

But free-trading/neoliberal societes have still bigger wages, more life rate expectancy and more luxuries and social benefits that other non-free-trading/neoliberal societies."

78.74 years: US life expectancy
83.84 years: Japan life expectancy

Japan is highly protectionist. Your friends are wrong.

Blogger bob kek mando - ( Heterosexuals Live Life On The Easiest Reproductive Setting ... which means that the entire world will be OPPRESSIVE until the Law requires everyone to have a sex change ) September 18, 2018 9:16 AM  

11. Jackson Peds September 18, 2018 9:03 AM
Just a tidbit; I am not American, I am Greek



ah.

ask them when "Greece for all the peoples of the world" became a 'founding principle' of the Greek people.

it's so strange, how EVERY western, 1st world society just suddenly decided post ww2 that Universal Immigration was suddenly a critical policy.

you might also point out, that OF COURSE Marxists are allied with Turd World immigration;
in Marxist terms, the Proletariat is "Internationale".

the allegiance of the Marxist ( whatever the flavor ), is with the Most Proletarian. and a Sub-Saharan African living on a $100 / year is definitely more Proletarian ( holy ) than you or anyone that was born in Greece.

remember, the goal of Marxism is a Total War between Economic Classes in which the Proletarians destroy the Bourgeoisie.

Blogger The Observer September 18, 2018 9:19 AM  

Sometimes, people like to quote Lee Kwan Yew on free trade.

It's helpful to remind them that due to its oversized port and financial sectors, Singapore makes money off the churn rather than actually producing or consuming the goods that pass through its port.

Blogger BR MK September 18, 2018 9:27 AM  

It is true that China's imports are much smaller than US's. So if they want to retaliate they will have to target individual companies. American companies , as an aggregate, are much more valuable than Chinese companies. I don't know what american companies are more vulnerable to Chinese retaliation , but would guess that Wall Mart, Boeing and GE are on the list

Blogger LP999-16 September 18, 2018 9:31 AM  

Thank you for the transcript. I enjoy hearing the streams but reading is better. Thank you for solid audio and a great presentations or communications.

A Daily Meme is the latest darkstream.

Blogger Damelon Brinn September 18, 2018 9:33 AM  

It seems to me that wealthy nations frequently adopt free trade policies to bring in more foreign goods for them (especially the elites who make the policies) to spend their wealth on, and to lower import costs so they can afford more of it. That would make free trade a symptom of wealth, not a cause of it. But that could be difficult to explain to people when few understand that correlation is not causation.

Blogger Crush Limbraw September 18, 2018 9:33 AM  

Two points - made by Paul Craig Roberts and Charles Hugh Smith - which I found in my consolidated archive/library - word searched 'offshoring':
1 - Half of China's exports to US are from American corporations which went offshore - https://crushlimbraw.blogspot.com/2018/06/how-long-can-federal-reserve-stave-off.html?m=0
2 - Globalization is a predatory practice, absolutely devastating to American middle class workers - https://crushlimbraw.blogspot.com/2018/08/of-two-minds-our-prosperity-is-now.html?m=0 - notice the graphs
Would appreciate any comments on these, Vox.

Blogger Francis Parker Yockey September 18, 2018 9:46 AM  

This comment has been removed by the author.

Blogger BR MK September 18, 2018 9:52 AM  

18. Crush Limbraw: great blog, very interesting posts.

Blogger Daniel September 18, 2018 10:12 AM  

Free trade is war.

Blogger Tars Tarkusz September 18, 2018 10:15 AM  

What about the drop in C? If we cut imports through a tariff program, doesn't that also cause consumer spending to decrease?

These people never contextualize Smoot-Hawley. Bringing that up should apply to the Chinese, not to modern America. The US was a huge net exporter at the time and the retaliations hurt us. The US was to 1930s what China is to the 2010s.

Blogger tuberman September 18, 2018 10:16 AM  

"In the category of worst economist in the history of mankind (a yuge list, granted) I nominate Ritardo."

I believe I read from Keen that Ricardo was in on the Rothschild scam to make money and take over the Bank of England after the Battle of Waterloo. He made a million pounds sterling personally, by being in on that scam. This was the integrity and character of David Ricardo.

Blogger LP999-16 September 18, 2018 10:16 AM  

POTUS is standing up for America, let China sit and marinate.

Apple and Google left America for China, please Facebook and Twitter, go to China, go to worship them and get out of America. GE and the rest, just get out of here.

Trade war, boohoo, poor China, China is in Africa, go pester them and take your junkwares there, those poor people in Africa to China, their suffering, their pains are unheard, silenced and forgotten, so burn in hell China, Apple, Google, you cry babies.

Great, I hope China retaliates. That only drives Americans to building and create their own things. ZFG.

China gets a free pass like the middle east and NOKO for the labor camps, immense modern day slavery, human abuse - America did nothing in the 1950's when the nationalists in China lost and China went communist. Or am I wrong -

Blogger LP999-16 September 18, 2018 10:21 AM  

How many time were we warned by Pat Buchanan and then Vox about trade wars, deficits, Ricardo - many times, many decades.

China is upset b/c America is making a comeback after horrific administrations.

China's movies feature their struggle agasint the drug war, China and the American govt likes to flood America with drugs, what about that, is that true too.

Blogger James Dixon September 18, 2018 10:46 AM  

> What about the drop in C? If we cut imports through a tariff program, doesn't that also cause consumer spending to decrease?

Only if there's no equivalent US product to buy. Spendable money is spendable money. It tends to get spent.

Blogger Opiter September 18, 2018 10:55 AM  

Anyone have any reading recommendations for understanding tariffs and their real effects? A large portion I've seen are books talking about how bad tariffs are or why muh Free Trade is so much better, or are only tangentially related to the tariffs themselves.

Blogger Crush Limbraw September 18, 2018 11:06 AM  

I word searched Tariff free trade - https://crushlimbraw.blogspot.com/search?q=Tariffs+free+trade&max-results=20&by-date=false&m=0 - many many articles - some by Vox.

Blogger Roddie Piper September 18, 2018 11:09 AM  

Not only do the Chinese import much less from us than we import from them, it's mostly stuff they can't do without, like soybeans.

Blogger Opiter September 18, 2018 11:23 AM  

@Crush Limbraw, thanks, I'll give it a thorough look.

Blogger James Dixon September 18, 2018 11:32 AM  

> Anyone have any reading recommendations for understanding tariffs and their real effects?

It's not complicated. Tariffs raise the price of the products they're placed on. This will either lower the demand for those items or (if they essential) cause more money to be spent on them and less on other items.

What makes things interesting, and why some folks are opposed to tariffs in general, is that your trading partners may react negatively to your raising tariffs, and respond in kind.

Blogger Knoggelvi September 18, 2018 12:01 PM  

@12 It would be better to compare the life expectancy of the Japanese vs the life expectancy of Japanese people living in America since there could be quite a few cultural or genetic reasons why they live longer lives. I haven't been able to find anything solid after a really quick search but it looks like Asian-Americans have a higher than 83.84 year life expectancy. If this is the case would you accept this as a point in favor of free trade economics?

Blogger VD September 18, 2018 12:10 PM  

It would be better to compare the life expectancy of the Japanese vs the life expectancy of Japanese people living in America since there could be quite a few cultural or genetic reasons why they live longer lives. I haven't been able to find anything solid after a really quick search but it looks like Asian-Americans have a higher than 83.84 year life expectancy. If this is the case would you accept this as a point in favor of free trade economics?

Stop sperging. This isn't dialectic. It's a rhetorical response to a nonsensical objection by ignorant people.

Blogger Knoggelvi September 18, 2018 12:11 PM  

Fair enough

Blogger Tars Tarkusz September 18, 2018 12:25 PM  

@26 In many cases, there isn't. Not sure if tariffs are specifically targeted in such a way that there are American substitutes which can be purchased.

Peter Schiff made the point that unless manufacturers know the tariff is long term, they are not going to re-shore to the US.

This is why having a free-trade policy is so bad. Even with tariffs, manufacturers are unlikely to bring manufacturing back home because the tariffs could come down in a month. We need a long term change of policy.

Blogger CYGNUS FACETIOUS September 18, 2018 12:40 PM  

Tariffs are what reign in 'Big L' libertarians in the end; NAP infringement requires a proportionate, tit-for-tat response. 'Free Trade' is a shibboleth the 'anarcho' half of AnCaps too often attributes exclusively crony capitalist self-interest. For enterprise to be unfettered in one's own land, trade chicanery from other states cannot be abided.

Blogger Ariadne Umbrella September 18, 2018 12:59 PM  

The main interesting point that I'm not sure about- not sure how to check- Reagan championed free trade- but not for his industry- Hollywood did not have 'free trade' with other filmmaking countries. Reagan wanted free trade to punish 'uncouth' executives in the shoe industry- one example that made it into a book. He didn't bother to ask if factory owners in other countries were also 'loutish' 'thuggish' 'unpolished' - un-Hollywood charm school-ish.

The tech funder for Zappos was a Chinese Harvard graduate who was shocked at the behavior of department store buyers- they made shoe company reps behave in humiliating ways to get orders- one department store buyer dropped his trousers and demanded the shoe rep kiss his behind-right there, out in the open- and the man, desperate for the sales ticket complied.

Now, we know the group that both department store owners and managers come from, and we know the group that took up a great deal of personal item manufacturing came from, and we know who finances Hollywood. From where I'm standing- it looks like a hit job from one synagogue onto two other synagogues. No Americans seem to be involved, except as employees.

Since Free Trade took hold in China, we've been lectured about their terrible behavior in factories. My guess is that Reagan never considered that factory owners, worldwide, could not substitute for debonair movie flim-flam actors.

Blogger Fred September 18, 2018 1:16 PM  

Trump should close US ports to all Chinese goods. In 6 months American ingenuity will replace their crap and eliminate them as a player. That is, if they dont declare a hot war against us first because they know if we did that they would be totally screwed, while the US would not be screwed:we dont export as much to China as they do to the US.

Blogger InformationMerchant September 18, 2018 1:23 PM  

You've used the "C plus I plus G Plus X minus M" argument quite a few times. How robust is it?

I like it and happily use it against Austrians to demonstrate that for consumer purchases such as cocaine, it's obviously better for a nation's economy that the cocaine is bought from within the country rather than from outside. They have to do some mental gymnastics to explain that he would've bought X amount of cocaine anyway, which goes against how the price system works. So the only argument is "he spent more money on the same amount of cocaine and the unseen effects were he was unable to use the money he had left over to create value."

I'm comfortable using that argument for my best cherry picked examples. The problem I have is, there is a point it breaks down, but I can't quite wrap my head around how to calculate where that point is.

So the absolute worst cherry picked case against that argument that I have knowledge of is plastic board game pieces. This argument was valid 2 years ago or so when I last looked into it and as far as I know is still valid now.

If I wanted to create a board game with good quality miniatures, China make the best quality miniatures and do so at the best price. They're far better than any other country when it comes to plastic injection technology.

If I had plans to crowdfunded this project and suddenly found myself incapable of using China for miniatures, I wouldn't be able to find any country anywhere else in the world that I could use to provide this service at close to the same quality or cost, so I wouldn't be able to create the product as designed.

I don't have a refutation for that other than the very weak argument featured in the cocaine example "well, maybe I'd use that money to make something else that added to my nation's GDP."


Both of these examples are as extreme as I could think of. I can't see a way to estimate the cost or percentage of imports that are relied upon for exports.

Blogger Jack Amok September 18, 2018 1:50 PM  

"But free-trading/neoliberal societes have still bigger wages, more life rate expectancy and more luxuries and social benefits that other non-free-trading/neoliberal societies."

As James hinted at, they have the cause and effect backwards. Only societies that are already prosperous can afford to be free-trading/neoliberal, because those practices are ruinously expensive. If you're not already rich, you can't afford them. If you are already rich, you can't afford them for very long...

Blogger Lurker September 18, 2018 1:54 PM  

"Only societies that are already prosperous can afford to be free-trading/neoliberal, because those practices are ruinously expensive. If you're not already rich, you can't afford them. If you are already rich, you can't afford them for very long..."

Same goes for lefTARD diversity.

Blogger Solon September 18, 2018 2:00 PM  

Presumably, this would spur a growth in the plastic injection industry elsewhere: if China gets embargoed and can no longer sell plastic board game pieces, they're freeing up an, admittedly not very large, market for others to capitalize on.

If I had heard that China was getting booted out of a $3 Whatever-illion industry, I might indeed think "Hey, I'm gonna get in on that deal."

In the short term, yeah, you as the consumer will suffer, but in the long term, more factories and plastic injection jobs will open up here, it'll get cheaper as you go, the quality will approach parity, etc. The only reason it doesn't happen now is because China has such a dominant market hold, there's no way to get your foot in the door. This is why America has anti-trust and Monopoly laws, by the way.

Notice that in this hypothetical situation, both sides suffer in the short term but the market eventually rebalances. What does NOT rebalance is Chinese plastic injection jobs; their industry gets GUTTED. All that product and experience and no way to get buyers that they can afford to sell to past tariffs.

Blogger James Dixon September 18, 2018 2:14 PM  

> In many cases, there isn't.

Examples? I can't think of any offhand, but I seem to be operating at half speed today.

Blogger Dirk Manly September 18, 2018 2:58 PM  

@7

"Stopping the flow of U.S. dollars to China keeps those dollars at home where they will be invested in our economy instead. Hence, our economy grows and China's shrinks. And we can do this all day because even if the price of domestically produced goods grows the money is still in our economy instead of going to China."

And THAT is the MOST important part of all of it.

Blogger Snidely Whiplash September 18, 2018 3:01 PM  

InformationMerchant wrote:If I had plans to crowdfunded this project and suddenly found myself incapable of using China for miniatures, I wouldn't be able to find any country anywhere else in the world that I could use to provide this service at close to the same quality or cost, so I wouldn't be able to create the product as designed.


Bullshit. Americans INVENTED that technology, Americans PERFECTED that technology, and American companies, in business, right now, are perfectly capable of doing the work. The problem is that they won't do it at the price you want to pay. So, for your crowdfunded game, rather than spend $.50 on markers, you'll have to pay $1.50.

Whoop-de-friggin-do.

Blogger Dirk Manly September 18, 2018 3:08 PM  

@7

"China makes tons of goods but those are useless"

That's the heart of the problem. Everything they make breaks orders of magnitude sooner than it should.

Blogger Snidely Whiplash September 18, 2018 3:13 PM  

60 seconds searching:
https://www.protolabs.com/services/injection-molding/on-demand-manufacturing/
Molds start at $1500
$.85 per piece for small, less detailed pieces.
Manufactured in Minnesota

Blogger James Dixon September 18, 2018 3:13 PM  

> The problem is that they won't do it at the price you want to pay.

But amazingly enough, a 200% tariff levels that playing field. :) Strange how it works, isn't it?

Blogger Dirk Manly September 18, 2018 3:15 PM  

@15

"I don't know what american companies are more vulnerable to Chinese retaliation , but would guess that Wall Mart, Boeing and GE are on the list"

Sam's heirs can go screw themselves, and start honoring his principles by buying American-manufactured products. (The reason so many retail goods manufacturers move to China was because Sam's heirs betrayed his vision, and DEMANDED that all manufactured-goods producers move their factories to China, or Walmart would not purchase ANYTHING from them).

More than anyone, I blame Sam Walton's children for the economic destructino of the U.S.A. -- even more than the (((bankers))).

Blogger Dirk Manly September 18, 2018 3:18 PM  

@22

"2. Tars Tarkusz September 18, 2018 10:15 AM
What about the drop in C? If we cut imports through a tariff program, doesn't that also cause consumer spending to decrease?"

As manufacturing moves back into the US, then C wiil INCREASE, due to less unemployment AND higher wages for most workers and managers.

Blogger James Dixon September 18, 2018 3:19 PM  

> If I wanted to create a board game with good quality miniatures, China make the best quality miniatures and do so at the best price.

You're sure of that quality? And you're sure the miniatures aren't painted with lead paint or have other contaminants of an even worse nature? I wouldn't be willing to bet on either one. Even if it were initially true, Chinese companies are infamous for swapping out products with lower quality versions after the contract is signed.

Blogger James Dixon September 18, 2018 3:21 PM  

> More than anyone, I blame Sam Walton's children for the economic destructino of the U.S.A. -- even more than the (((bankers))).

Yeah, Sam Walton was proud to display the Made in America logo on his merchandise. His kids and the current management, not so much.

Blogger Dirk Manly September 18, 2018 3:25 PM  

@38

"Trump should close US ports to all Chinese goods. In 6 months American ingenuity will replace their crap and eliminate them as a player."

Everything made in China was INVENTED AND DESIGNED IN AMERICA. It won't even take 6 months for steps to be taken to begin moving operations back to U.S. shores. The plans can literally be sent out to manufacturing shops in the U.S. within hours of a national policy change. They, in turn, will expand their facilities as rapidly as they can.

Blogger Dirk Manly September 18, 2018 3:29 PM  

@39

"If I wanted to create a board game with good quality miniatures, China make the best quality miniatures and do so at the best price. They're far better than any other country when it comes to plastic injection technology."

ALL of that plastic injection technology was invented here. Chinese DO NOT CREATE -- 5000 years of conformist government policy ("The tallest blade of grass gets trimmed the most") has literally removed any creativity from their genes.

Blogger Dirk Manly September 18, 2018 3:33 PM  

@52

"Yeah, Sam Walton was proud to display the Made in America logo on his merchandise. His kids and the current management, not so much."

Walmart's board of directors, significant stockholders (Sam's heirs, who basically pick the board of directors) and all managers whose title begins with C and ends in O should be jailed for life. Pour encourager l'outres.

Blogger FP September 18, 2018 3:58 PM  

I'm getting some good laughs lately on various tech forums as people slowly start complaining about the tariffs incoming on computer parts. Nevermind the bit-coin mining influence on prices, the ram cartels price fixing again the last 2-3 years or insane price increases for nvidia's new video cards, lets all worry about tariffs on electronics etc.. All because one custom case builder recently went out of business supposedly because of aluminum tariffs.

Blogger InformationMerchant September 18, 2018 4:48 PM  

Let the record show, my argument was that it's theoretically possible that a product may require a part to be imported in order to be made.

42's answer covers all bases on this. (Provided trade is suspended for long enough for an industry to pop up elsewhere.)

Now to dig myself in deeper with my (cherry picked) example and the refutation that it be done elsewhere.

@45 Inventing something doesn't say anything about your future ability in it. For example England invented Football and Cricket, they aren't the masters of the universe in either.

Being the best at something once doesn't say anything about the future either. Again, 1966 for football and fairly recently world number 1 in Cricket.

I haven't followed football for 5 years or so, but last I checked English players cost about three times as much as a player of the same quality from a different nation.

The "invented and perfected" thing had better be wrong for your argument's sake anyway, as anything invented before America was founded would be subject to your argument.

The three times cost at the end of that comment was pretty interesting as iirc the minis are over 90% of the production costs. The joke used to be that people were crowdfunding miniatures and if it looked like it'd fund, they'd design a game to go with them.

You were kind enough to provide an actual quote and company though, so I'll try to find an example of their work and return to this point.

@51

Yes, for mass produced minis. That's why I used the example. There were companies that used European and North American companies to make their minis at the time and the games were $10-20 more than average and had lower quality minis. They'd never have been able to crowd fund due to the components being so bad.

The minis that were used in crowdfunded board games at the time were unpainted. The minis themselves were safe. I wouldn't trust Chinese steel as far as I could throw it, but for this example, they were actually the country people went to in order to get the best quality minis of that type.

@54 Yes creativity was murdered out of them. I'm not claiming they invented it. If Americans get regulated to hell and the Chinese get given an American invention with free reign, eventually the Chinese will become better at it.

I admit, I have no idea how much of a free reign they actually have. From green regulations and workers rights, I'd say they are at least freer in some ways than American companies.

If Russia and China are gaining on the American military, an industry America actually tries to compete in, it's not implausible that America could fall behind another country in an industry they don't care about nearly as much.



Time to try to find a comparison for @47.

Blogger Dirk Manly September 18, 2018 5:11 PM  

The last thing the Chinese improved or invented was (money / paper currency).

They have produced no inventions, or even improved on an invention, since then.

Blogger Dirk Manly September 18, 2018 5:13 PM  

Are plastic game pieces really a necessity of life?

You're really using a lousy example. If it's IMPORTANT people will make it here, and people will pay the additional cost (especially since their incomes will be going up because we're no longer sending so much money overseas for manufacturing costs).

Blogger Dirk Manly September 18, 2018 5:13 PM  

since game pieces are NOT a requirement for life, both price elasticity and demand elasticity are very high.

Blogger James Dixon September 18, 2018 5:19 PM  

> If Americans get regulated to hell and the Chinese get given an American invention with free reign, eventually the Chinese will become better at it.

Not necessarily better, but definitely cheaper. Better is mostly a matter of caring about your product, caring your customer service, and your manufacturing processes.

Blogger Were-Puppy September 18, 2018 5:20 PM  

@27 Opiter
Anyone have any reading recommendations for understanding tariffs and their real effects?
---

Search the left side of the blog for
Vol 1.1: Ian Fletcher
Vol 1.2: Karl Denninger
Vol 1.8: Steve Keen

Listen to these, they are good interviews, and you will learn from them good books to look into.

Blogger InformationMerchant September 18, 2018 5:38 PM  

@59 I cherry picked the best and worst examples I could think of.

We're not communists. Bernie Sanders complaining that we don't need more than a couple of types of deodorant isn't going to score points.

I appreciate you're making an intelligent economic argument because we won't all die without pretty board games, but if my example holds, GDP would be reduced in this instance.


To make a serious point, although plastic pieces aren't required to live, if Vox ever crowd funds an Alt Hero or Selenoth board game, he'd need plastic pieces if he wants to compete with the big ones.

https://www.kickstarter.com/projects/poots/kingdom-death-monster-15

$12,393,139
pledged of $100,000 goal
19,264
backers

https://www.kickstarter.com/projects/steamforged/dark-soulstm-the-board-game

£3,771,474
pledged of £50,000 goal
31,178
backers


https://www.kickstarter.com/projects/cmon/rising-sun

$4,228,060
pledged of $300,000 goal
31,262
backers


Watch out for that awkward currency change on the second one. It was from early 2016, the pound was about 1.5 dollars back then, so it'd be approximately $5,657,211.

Disclaimer: I may have just owned myself as I have no idea where those minis were made.

Blogger InformationMerchant September 18, 2018 5:42 PM  

@61 Point taken, although Steve Keen has made the point that innovation requires people to participate in an industry.

I don't want to parrot mindlessly, but I think the principal somewhat applies to the manufacturing process here. It won't do anything for their customer service, but if they make technological gains, it'd be odd for them not to use those gains to compete with high quality products as well as the typical attempt to be cheaper than everyone else.

Blogger InformationMerchant September 18, 2018 6:16 PM  

I yield to @47's googling skills.

That company does come up when people making board games look for an American company, but I cannot find an apples to apples comparison on quality and price.

He wasn't claiming the price would be the same, although his earlier post suggested a 270% increase in production costs would still be viable.

I'd like to find some evidence just to know how good Americans are at this without being 10 times the cost or something silly. (At that point you approach Games Workshop metal figures used in Warhammer and 40k. Assuming they haven't gone backwards in the almost 2 decades since I last saw those.)

Blogger The Deplorable Podunk Ken Ramsey September 18, 2018 6:26 PM  

InformationMerchant wrote:Steve Keen has made the point that innovation requires people to participate in an industry.

That's an excellent point, because technology follows production always. This idea that well we will design it here and offshore production was always short-term thinking. That only works for a small window in time, before the guys who are making the things arrive at point where they don't need you in the loop anymore.

Tars Tarkusz wrote:Peter Schiff made the point that unless manufacturers know the tariff is long term, they are not going to re-shore to the US.

This is why having a free-trade policy is so bad. Even with tariffs, manufacturers are unlikely to bring manufacturing back home because the tariffs could come down in a month. We need a long term change of policy.


One of the main pillars of the economy in the Appalachian piedmont where I am from was furniture manufacturing. Pretty much the entire industry split for China. It took the Chinese about 10 years to shut us down. Maybe we can do better and get at least competitive in, say, 5 years? I hope so, but I also doubt it because the Chinese did not do this alone. They had inside help, a ton of it, coming from the American furniture retailers led by the Wal-Mart philosophy of the time, the Wall Street banksters, and the criminal cabal in Washington.

Re-starting an industry is not a trivial task at all, the classic case I suppose is expressed in the famous essay, "I, Pencil", where once you begin to see what it takes just to manufacture one pencil you get bogged down into incredible realizations about the scale of what needs to be in place. Getting a competitive furniture manufacturing operation up and all the attendant pieces of supply chain and machine-tool support is not like switching on a light.


It's going to take time. We have to get busy. And we have to keep Trumpism or MAGAism or whatever you want to call it alive and going for the long term. Or it isn't going to happen. This is a long game.

Blogger Dirk Manly September 18, 2018 6:50 PM  

This comment has been removed by the author.

Blogger Dirk Manly September 18, 2018 6:51 PM  

@63
"To make a serious point, although plastic pieces aren't required to live, if Vox ever crowd funds an Alt Hero or Selenoth board game, he'd need plastic pieces if he wants to compete with the big ones."


Who do you work for, Hasbro?

They RUINED Cosmic Encounter by changing from cheap, cardboard pieces to oh so clever plastic pieces.

Why?

Because they were more interested in lame asthetics of plastic pieces than they were in the game play that made previous incarnations of Cosmic Encounter so much fun.

Milton Bradley wargames (with fancy plastic pieces) vs ANYTHING made by Avalon Hill, SPI, Victory Games, Battleline Games, GMT, or Clash of Arms.. (all of whom use boring little printed cardboard pieces).

Plastic Pieces are things that break, and are impossible to replace when one piece gets lost.

Why don't you ask Vox how many Plastic Pieces there are in the Squad Leader / Advanced Squad Leader series of games...

Ob sheesh: sheesh!

Blogger James Dixon September 18, 2018 7:28 PM  

> Plastic Pieces are things that break, and are impossible to replace when one piece gets lost.

A company truly dedicated to customer service would off download 3d printer templates for those pieces on their website, probably requiring proof of ownership to download though.

Blogger Tars Tarkusz September 18, 2018 7:39 PM  

@43
Well, I don't think there are any TVs made in America. There are probably some assembled in America with foreign parts and foreign designs.

Another problem is the Walmart market. American made products (manufactured goods) if they exist at all, are high end very expensive stuff. Tools are a good example of this.

Ford used to bring raw minerals into the Ford plant and send cars out the other end. They made their own steel onsite, their own vinyl onsite, their own carpet on site, their own glass onsite, nuts, bolts, springs and wiring all onsite manufactured from raw materials. Even the radios were made onsite with just the components brought in from other American manufacturers. I don't think they made the tires themselves either.

Americans invented the P-N junction, the transistor, ICs, the processor etc and now nearly all of it is made in foreign lands.

Blogger Snidely Whiplash September 18, 2018 8:40 PM  

Stop sperging. The point is that these things are available from US manufacturers. The idea of a tariff is to equalize the cost basis so that American goods can compete, not to cut off trade with China. If there's a 300% tariff on injection molded plastics, then the disadvantage to American manufacturers disappears and they can compete on quality and service.
InformationMerchant wrote:The "invented and perfected" thing had better be wrong for your argument's sake anyway, as anything invented before America was founded would be subject to your argument.


You completely missed the point. Your claim was that American companies COULD NOT manufacture these things. There is virtually nothing American manufacturers cannot make, absent market interference like patents.

InformationMerchant wrote:my argument was that it's theoretically possible that a product may require a part to be imported in order to be made.

This is simply false.

Blogger InformationMerchant September 18, 2018 8:50 PM  

@68 The vast majority of people agree with you on the Cosmic Encounter example, although people are happy with the current incarnation (which does use plastic).

Any cardboard chits > plastic stance you take on a crowdfunding platform will go very very badly for you though.

I say this as someone that prefers 20 year old video games to current video games. If I tried to crowdfund the type of video game that I like, I'd get crushed due to outdated graphics.

The average backer likes pretty. You might be able to get away with it in a war game because that's one hell of a filter.


Remember, we're talking about crowdfunding today, but even using boardgamegeek to compare two existing old products:


https://boardgamegeek.com/boardgame/243/advanced-squad-leader
https://boardgamegeek.com/boardgame/243/advanced-squad-leader/stats

https://boardgamegeek.com/boardgame/10630/memoir-44
https://boardgamegeek.com/boardgame/10630/memoir-44/stats

I wanted to like Memoir 44 but I can't take the randomness on top of randomness not only dictating whether you hit but dictating whether you have to ignore one of your flanks getting destroyed. I'm pointing this out despite not liking the game with minis.

Game: ASL vs Memoir
Rating: 8 vs 7.5
Number of Ratings: 3.2k vs 22k
Own: 5.1k vs 27k
Want in Trade: 120 vs 929
Wishlist: 667 vs 4.6k

I didn't claim plastic makes a game better. This also doesn't mean the number of people that own the game with minis own it purely due to the minis (I already said the war game category is an intense filter).

As far as plastic breaking, I have good news for you. The things I'm talking about are much bigger than the tiny army men that Risk came with that tended to lose half of their guns from time to time.

The plastic is better too. The guy on the left looks like he's going to lose the flames from his sword: https://1.bp.blogspot.com/-BV8DwLK7ukI/VvkvkrAa1UI/AAAAAAAAI7E/YetHAwQkg5EMkA6HyEim0VYDN3QqDkuwA/s1600/20160324_213607.jpg

Although I wouldn't test this on mine, I'd bet a small amount of money that the sword would bend rather than break. I've never had a problem with a miniature breaking from a board game from this decade.

Source for that guy is https://www.kickstarter.com/projects/cmon/blood-rage
$905,682
pledged of $50,000 goal
9,825
backers

(15 days in 2015, not even close to the biggest kickstarters but I doubt Vox would mind if a board game he crowdfunded had those numbers. They sold way more of these after the Kickstarter, it's an incredibly popular game.)

Blogger InformationMerchant September 18, 2018 9:34 PM  

@71 I've said I can't find evidence to the contrary so I can't contest your claim that they're available from US manufacturers. I made a post purely to concede that point.

I made it clear that I was responding to the idea that 0 imports will make GDP go up. In the video Vox said 0 trade can be optimal for some. The argument "as consumer spending plus investment plus government spending plus exports minus imports, so what happens when you reduce imports the economy grows. You know, this is an absolutely straightforward mathematical relationship, it is a very simple equation," is in the Trade War video with imports and exports getting reduced to 0: https://youtu.be/v0YBVimohJY?t=151


Yes, I've conceded that point due to my inability to provide evidence to support my claim. (Be happy, you won an argument on the internet. You didn't make me do a 180, but this is pretty rare nonetheless.)

------

That last part you quoted wasn't meant how you seem to have taken it to have been meant.

The last part was "it's theoretically possible that a product may require a part to be imported in order to be [viable to be] made."

It wasn't a possible vs impossible claim like kangaroo leather clothes or something, it was on the inevitability that 0 imports will nudge some products from profit into loss.

Blogger Azure Amaranthine September 18, 2018 10:27 PM  

You know, the deception with free trade is the same as the deception with free speech.

The stated concept is "there are no rules or restrictions." (Satanism, anyone?)

The under-the-table reality is that "free" actually means "I don't know and/or I'm brainwashed to obey the actual restrictions without seeing them as restrictions".

The reality from ground level is if you don't set the rules for yourself, someone else will rule your ass, every single time. In any and every given scenario, if you think there are no rules, someone else already rules your ass, you just haven't noticed it yet.

The easy way to say this? TANSTAAFL.

Blogger Jack Amok September 18, 2018 10:48 PM  

InformationMerchant, do you realize that your assertion that Chinese injection molded plastic factories have driven American ones off the market is proof that mercantilism works? How is it that you think China accomplished that feat, assuming of course that they really did?

If China is the only place to get decent injection molded plastic parts, then it's because China conducted a years-long program of mercantilism advantaging their manufacturers over foreign ones.

So either you're right, which proves Trump is right, or your wrong, which proves Trump is... also right.

Blogger Lyon September 18, 2018 11:22 PM  

@74. "In any and every given scenario, if you think there are no rules, someone else already rules your ass, you just haven't noticed it yet."

True.

Blogger Jack Amok September 18, 2018 11:27 PM  

Even if it were initially true, Chinese companies are infamous for swapping out products with lower quality versions after the contract is signed.

A curious phenomenon that can be found in Amazon reviews. When I find a (physical) product with an overall high average review score, I try to remember to sort by most recent reviews before clicking the buy button. Sometimes, despite the fact that a product has hundreds or even thousands of 4 and 5 star reviews, all the most recent ones are 1 and 2 stars. Often you will find a 1 star review with a comment along the lines of "When I first bought this product back in 2012, it was great. Really well made. When I finally had to replace it because it wore out, I gladly re-ordered the same thing. But what I got was nothing like the original. Cheaply made, poor quality, lousy materials..."

Of course it was Made in China. Chinese factories usually have one - and only one - high quality production line with quality equipment and competent workers. They use that to get the initial order, then as soon as they can, switch your production to the crappy, cheap line so they can use the good line to hoodwink the next round-eyed sucker...

Blogger InformationMerchant September 18, 2018 11:31 PM  

@75 It's more nuanced than that. Most American ones won't do board game pieces and originally people went to China because it was cheap. Crowdfunding and a few other things massively changed the market and the quality of all components improved massively.

Trump's tactics aren't relevant here. He's putting tariffs on countries that already have massive tariffs on America. He's -saying- that his goal is making them reduce their tariffs.

I was saying that you always want Americans to get any consumable such as cocaine that has no useful effect from America but some imports are used to make products and this one particular argument seems oversimplified or I'm worrying about a statistically insignificant number of products.

VD converted me from Libertarian to Alt Right by stopping me from being a free trader, he did this years ago. There are plenty of good arguments why free trade is a bad idea. (Ranging from Vox's "people are going to have to move too much", to a modern "just build your factory here.")

I was simply asking about one argument that I like overall (and use) because I didn't have a good response to the point I'd make if I were arguing against myself.

Naturally, I had a feeling that asking that question here would lead to this, but I'd rather have talking to intelligent people that share my world view than when I'm arguing free trade isn't a good thing for America vs someone that thinks free trade is America's best option.

Blogger InformationMerchant September 18, 2018 11:37 PM  

have difficulty*

"I'd rather have difficulty talking to intelligent people that share my world view than when I'm arguing free trade isn't a good thing for America vs someone that thinks free trade is America's best option."

Blogger Snidely Whiplash September 19, 2018 12:04 AM  

This comment has been removed by the author.

Blogger Snidely Whiplash September 19, 2018 12:12 AM  

InformationMerchant wrote:It wasn't a possible vs impossible claim like kangaroo leather clothes or something, it was on the inevitability that 0 imports will nudge some products from profit into loss.
Fair enough.
Any trade policy at all will advantage some over others.
A Mercantilist trade policy will advantage domestic manufacturers over foreign.
A free Trade regimen will advantage Foreign manufacturers (and domestic banks) over domestic manufacturers.
A Nationalist trade policy will advantage domestic working class over foreign manufacturers and international banks.

You don't get to opt out and pretend you're not picking a winner just because you call it "free trade"

Blogger Jack Amok September 19, 2018 12:14 AM  

If you're using cocaine as an example, don't expect to be taken seriously.

Blogger InformationMerchant September 19, 2018 12:45 AM  

@82 It's the strongest example I can think of and use it talking to AnCaps that not only use outlandish examples too but believe in the legalization of all drugs and a legal system entirely based on the NAP.

Under their system, if a 14 year old girl asks you for cocaine, it's not breaking the NAP to give it to her. That person would probably be ostracized, but it wouldn't be illegal.

If you think examples involving cocaine are bad, you haven't heard the case for selling babies, selling your organs, selling yourself into slavery, legalized blackmail, legalized bribery of cops, legalized slander/libel, etc.

Then you have Libertarian theories for how to privatize oceans and space. Homesteading in general is interesting because they won't use eminent domain, but they will build under your house or over your house.

We also have abolishing the sex offender registry, removing worker restrictions (child labour, minimum wage, etc), abolishing copyright, abolishing patents, legalized RPG 7s and of course the dismantling of all government, replacing anything we still want with market solutions.

Then there's the fact that they're building towns in the sea (seasteading).

Cocaine is a really sensible example compared to most of that. I still think half of that stuff is a good idea. Anyway, those ideas are put forward by respectable, well thought of Libertarians. Eyebrows won't be raised, besides they love reductio ad absurdum.

Blogger Snidely Whiplash September 19, 2018 1:05 AM  

InformationMerchant wrote:Then there's the fact that they're building towns in the sea
No, they're talking about building towns in the sea, and occasionally getting hold of some off-shore structure so they can run criminal enterprises from them.

Blogger Jack Amok September 19, 2018 1:09 AM  

Then you have Libertarian theories...

If you're using Libertarians theories as examples, don't expect to be taken seriously.

Blogger Azure Amaranthine September 19, 2018 2:29 AM  

"the NAP."

Every single action taken to your own advantage tips the scales in a finite system. Continuing to breath is an aggressive action from the ultimate perspective, let alone such relatively carnal acts as eating, drinking, and monopolizing a desirable mate for reproduction.

Anyone who thinks the NAP is a good axis of morality needs to pull their head out and take a breath of fresh air, because the methane is definitely getting to them.

"No, they're talking about building towns in the sea,"

Yep. From the perspectives of resource and energy availability, transportation, and autonomy, the sea seems like a great idea.

Then you learn a few basic chemical and engineering principals and realize that the oceans are effectively giant vats of corrosive solution that will annihilate almost anything you put in them in a few years. Have fun building in an environment that will be a fair portion of the way through eating your town before you're even done building it.

Blogger James Dixon September 19, 2018 11:16 AM  

> Then you learn a few basic chemical and engineering principals and realize that the oceans are effectively giant vats of corrosive solution that will annihilate almost anything you put in them in a few years.

And the only viable solution we've found to that is tons and tons of rock. Otherwise known as an island.

Blogger Dirk Manly September 19, 2018 11:47 AM  

@72

"Game: ASL vs Memoir
Rating: 8 vs 7.5
Number of Ratings: 3.2k vs 22k
Own: 5.1k vs 27k
Want in Trade: 120 vs 929
Wishlist: 667 vs 4.6k"

Although I haven't played anything Squad Leader related since 1983, I know far more SL/ASL players than Memoir '44. I've seen M'44 being played .... once. At that same time, there were 4 ASL games being played in that room.

VASL, which became Vassal, wasn't written for the purpose of playing M'44 over the internet. The inspiration for the original code was ASL, and nothing else.

It was only an afterthought (when VASL 1.x series code development was discontinued to start writing Vassal 2.0 to generalize it to allow playing as many board games as possible. The latest Vassal code is 3.17).

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